The current value of Telecom Egypt’s stake in Vodafone Egypt stands between $1.2 billion and $1.3 billion.

Qatar Investment Authority is reportedly seeking full stake acquisition of Telecom Egypt in Vodafone Egypt, sources in the mobile market revealed to local Daily News Egypt.

The recently resumed negotiations are being centred around the portion of shares expected to be sold, with the Qatari fund seeking to procure the complete 45% government stake in Vodafone Egypt.

However, reports said the Egyptian government aims to sell only a portion of its shares as the months-long negotiations continue.

The deal could proceed in two stages; the first of which would focus on acquiring all or a portion of Telecom Egypt’s interest in Vodafone Egypt by one of the Qatari fund’s specialised companies before then moving on to purchase the remaining interest held by Vodacom of South Africa.

In addition to giving QIA access to the Egyptian market, this would also allow the fund to gain representation on the company’s board of directors.

Although no official statements have been made by either party, the agreement is expected to be finalised by 30 June, the sources said, as Cairo continues to seek $2 billion worth of investments.

Doha News has contacted QIA and Egyptian authorities for a statement but did not receive a response.

QIA appears to be keen to purchase all of Telecom Egypt’s shares as the Egyptian market is deemed to significant on a regional level. Establishing a presence in the local market through a company with a strong operator could boost QIA’s introduction into Egypt.

Vodafone Egypt’s market value is approximately $3 billion, down from $5 billion prior to the previous flotation. The current value of Telecom Egypt’s stake in Vodafone Egypt stands between $1.2 billion and $1.3 billion.

Earlier reports said QIA had held preliminary discussions in October to acquire a 20% stake in Vodafone Egypt from Telecom Egypt. At the time, Telecom Egypt said it had not received any official offer from any party regarding Qatar’s investment of approximately $2.5 billion.

Qatar-Egypt

Egypt is relying on investments and assistance that Qatar and other Gulf countries pledged last year in order to ease a foreign exchange crisis brought on by Russia’s invasion of Ukraine. But according to reports earlier this year, only a small portion of the money has actually been delivered.

In February, Qatar and Egypt inked a deal to combat double taxation on income and prevent tax evasion or avoidance following months of talk.

According to a statement released by the Egyptian cabinet, Qatar is keen on increasing its financial support for Egypt. The tax agreement, according to Qatar’s prime minister, will “tangibly” affect the expansion and promotion of foreign investment into his country.

Relations between Qatar and Egypt have been on an upwards trend since the signing of the Al Ula Declaration in 2021, in which the two countries buried the hatchet after a years-long political crisis. At the time Saudi Arabia, the United Arab Emirates, Bahrain and Egypt severed ties with Qatar and imposed an illegal air, land and sea blockade.

However, ties began to steadily progress since last year when Qatar’s Amir Sheikh Tamim bin Hamad Al Thani made his first trip to Egypt following the blockade, signalling a clear restoration of relations.

In May, a meeting between Qatar’s Minister of Transport Jassim bin Saif Al-Sulaiti and his Egyptian counterpart Kamel El Wazir explored mutual avenues of cooperation within the transport sector, Egypt Today reported.

As an integral part of this bilateral cooperation, a prominent urban transport company based in Qatar reportedly expressed its interest in managing and operating the Cairo Ring Road Bus Rapid Transit (BRT) system.

Separately, the Egyptian government said in March 2022 that Qatar and Egypt had struck investment agreements worth a combined $5 billion in various industries.

“Since last year, there are regular visits to Doha and to Cairo and also there was
an agreement for $5 billion, $3 billion deposited in the Central Bank of Egypt
and $2 billion dollars for investment,” Egypt’s Finance Minister Mohamed Maait told Doha News in an exclusive interview during the Qatar Economic Forum 2022.